Procure-to-Pay or the P2P process: what is it?

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Procure-to-Pay is the integration of purchase and payment systems through a more coordinated and step-by-step process. It is essential to manage the unpaid accounts area.

Procure-to-Pay or P2P processes consist of integrating systems so that the flow of purchasing and payment work is more efficient and carried out in a more satisfactory time.

Despite advances in business digitalization, many number library organizations still use manual tools or few digital resources to manage purchasing, billing, payment and accounting processes.

In this article you will discover how to improve the acquisition processes with Procure-to-Pay and understand what this concept means and what are the implementation steps.

What is Procure-to-Pay?
Do you know what Procure-to-Pay means? As previously mentioned, these are coordinated acquisition and payment processes .

Spend management depends on structured and well-defined processes to offer efficient results . Although it seems obvious, many organizations continue to use fragmented software, which slows down steps and makes managing accounts difficult.

In this sense, Procure-to-Pay, also called Purchase-to-Pay, encompasses three main points in the flow of purchasing work: request, acquisition and payment.

The P2P process considers a series of aspects such as strategic negotiation, commercial contract, order generation, physical reception, tax receipt, payment, accounting and all the steps that allow you to purchase a solution without any inefficiency.

P2P Processes
To better understand how the P2P process works, it is worth highlighting the main steps. Firstly, there must be a requisition order, that is, a purchase request. Here comes the entire process of going to the market to quote with the providers until choosing the best offer and generating the purchase order.

Once the purchase is complete, the provider carries out the service provision or delivery, which must be approved by the customer. Finally, the payment is made and the transaction must be registered in the company's records.

By assumption, each company has its own model, but this is a general description to show how important it is to deal with organized systems.

Also read: How to manage invoice without error?

Procure-to-Pay Steps
We now know how to work Procure-to-Pay in companies. Below you can see the details of seven steps of the P2P processes:

1. Request
The sector that demands the purchase of a good service requires a request. However, there are companies that do this manually and with complicated briefings. However, automatic systems can simplify this step.

2. Providers
With the request created, it's time to select potential providers. Some brands can opt for bidding, while others choose to do so more directly.

The important thing is that from the beginning it is clear whether the provider complies with all the company's requirements , for example, at the most basic level, whether it can issue an invoice.

3. Purchase order
The purchasing department issues a purchase order for each request. In companies with a high volume of requests, manual releases can become a major problem.

4. Receipt
Once the purchase is approved, you will receive the goods or services. It is important that the department responsible for the request follows up on this demand and informs the administration that everything goes well in the delivery/ejection processes.

5. Invoice
Luego, the provider must issue an invoice specifying the services. If the company has a longer billing period, it is important to highlight it from the first contacts with the provider.

6. Approval
The tax department must check and approve the invoice, ensuring that it corresponds with the purchase order data.

7. Payment
Finally, payment is made, which can be carried out through bank transfer or another method chosen by the company.

What are the benefits of Procure-to-Pay?
The adoption of P2P processes is a way to improve the quality of the entire work flow. Acquisition and payment operations are complex and subject to errors, which can be significantly reduced with the use of appropriate tools.

Discover the main benefits of Procure-to-Pay:

Cost reduction
P2P processes eliminate unnecessary steps, ensuring a more efficient use of resources, with economy and assertiveness.

Simplified acquisition process
Purchasing processes become simpler and more refined, as they begin to follow a rule for requests and approvals.

Global standardized processes
The request must be based on standardized processes, which mitigates errors and keeps all business sectors in tune.

Autonomy to negotiate directly with providers
From data collected by the P2P system itself, sectors can negotiate directly with providers in a secure, agile and transparent way.

More control over processes
Each step is very defined and clear. This means that the company has more control over the whole, being able to intervene in a more strategic way, whenever necessary.

End-to-end process vision
Management can see the purchasing processes from beginning to end, being able to implement improvements and reduce bottle costs.

Improved relationship with providers
Thanks to all this, the relationship with providers is strengthened, which speeds up acquisition and payment.

Automation of P2P processes?
Automating Procure-to-Pay processes is the company's best option for managing business purchases and payments.

This is a very complex work flow that requires attention and a high level of excellence. Any non-compliance implies risks and loss of image, as, for example, when a payment is not made or when an amount greater than the agreed amount is deposited.

The automation and integration of end-to-end processes allows steps to be implemented in a more fluid and assertive way , in addition to providing valuable data for the different sectors of the organization.

Therefore, it is possible to have a clearer and more reliable view of the company's expenses, which helps to improve performance as a whole.

SYDLE ONE for Procure-to-Pay automation
SYDLE ONE is the best solution to automate your company's Procure-to-Pay. The platform brings together a series of tools in one place, which simplifies the entire flow of work.

With SYDLE ONE the company can program the automation of repetitive and long-lasting tasks, avoiding failures and guaranteeing equipment more time to address more strategic activities.

The platform is responsible for managing requests, orders, physical receipts, invoices, payments and accounting, while people are responsible for the actions that will grow the business.

Furthermore, it is possible to manage all data, permissions, the automatic generation of documents such as purchase orders, the tracking of quotations and purchase suggestions based on certain criteria such as past purchases. Including, you can monitor the company's assumptions, stock and requested items to consolidate and make a larger purchase and obtain a better deal.